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The man associated with a highly debated patent is behind a new company designed to ferret out information that could invalidate patents such as his. Amazon.com, Inc. founder and chief executive officer Jeff Bezos is a major investor in BountyQuest, an Internet-based service that opened for business on Oct. 18. The new company’s mission is to help find evidence of “prior art” — an invention or idea that is not truly original — that can be used to contest the validity of a patent. Last Christmas season, Amazon.com sued BarnesandNoble.com for infringing on Amazon.com’s “one-click” patented method of on-line ordering. Amazon.com convinced a judge to temporarily enjoin BarnesandNoble.com from using this method during the peak season for selling books. Now, an appeals court will have to determine the merits of the case. But the man behind Amazon.com has recently put $1.25 million of his own money into a new venture that could blow the validity of the patent to smithereens. Amazon.com’s ordering method and Priceline.com’s method of matching bids and offers are examples of “business process” patents that have been issued by the U.S. Patent & Trademark Office. One of the harshest critics of issuing patents for business process patents, or for ideas of arguably dubious originality, such as a software program’s “look and feel,” is Tim O’Reilly, head of the computer-book publishing company O’Reilly & Associates. O’Reilly excoriated Amazon.com when he first heard about its suit to enforce the one-click patent. Surprisingly, instead of just defending the originality of his company’s idea, Bezos joined O’Reilly, agreeing that too many patents are being issued for too many ideas that do not represent significant new and original contributions. One downside of issuing patents for ideas that are not original — or are not genuine departures from the “prior art,” to use patent legalese — is that the patent may suppress intellectual development. Another is that the royalties, deserved or not, add to the cost of products that consumers buy and use. Bezos and O’Reilly decided to put their money behind their cause. The pair joined up with Charles H. Cella, an attorney who practiced intellectual property law at Boston’s Foley, Hoag & Eliot and at Los Angeles-based Lenard & Gonzalez. Through his work with Foley lawyers Matthew P. Vincent and Edward J. Kelly, Cella was familiar with traditional sources of evidence for researching the originality of new “inventions”. Such resources include foreign and domestic government records, on-line databases, and library archives. For example, U.S. patent information is available from the Patent & Trademark Office databases, which can be searched manually at the offices in Arlington, Va. The government databases are also available on CD-ROM or paper subscription, and online, at http://www.uspto.gov. Another major resource is the Richard W. McKinney Engineering Library at the University of Texas at Austin, which is available online at http://www.lib.utexas.edu. But the three IP lawyers recognized that these traditional sources of evidence of prior art were not always available, complete, or appropriate, especially in cases involving business practice patents. They believe that critical gaps in the information “safety net” allow derivative ideas to be patented and that this has a negative effect on both the economy and the progress of science and invention. The three lawyers — along with Bezos, O’Reilly, and others — formed BountyQuest to help companies find patent-busting evidence of prior art in out-of-the-way places. “We realized, as we were putting this idea together, the market prospects of a source of information on prior art,” Cella told American Lawyer Media News Service. This information may be in a magazine or newspaper article, a speaker’s presentation, or a consultant’s proposal, but if it’s out there, BountyQuest says someone may be willing to pay for it. “These cases are bigger than the two parties to the controversy. There is a common good involved, of patent reform, and preventing improperly granted patents from driving out good ideas,” Cella said. The fledgling company’s business model is for businesses seeking patent-invalidating evidence to post a “Wanted” bounty, starting at $10,000 and going as high as $1 million or more, on http://www.bountyquest.com. Each posting has a deadline for the submission of matching information. “The classic BountyQuest posting will be by a company that is, or may be, threatened by an infringement action,” Cella told ALM. Individuals — “bounty hunters,” in the company’s parlance — will be urged to send information about prior art involving posted patents or would-be patents. But that’s not the end of the search, Cella added. “We are seeking feedback from bounty hunters as to what patents they think should be knocked out,” Cella said. BountyQuest will determine whether the information submitted matches what was being sought. Although the company has several patent attorneys as officers and employees, it is not in the business of passing on the validity of patents. That is the Patent & Trademark Office’s function, Cella said. Companies must pay BountyQuest $2,500 to post a bounty, and must pay the bounty to the first hunter to submit complete matching information and, in successful cases, must pay additional fees to BountyQuest. For the posting company, the posting fee and the minimum bounty total much more than the typical patent search, but the goal is to find something that no one else has found. If a company can save millions of dollars a year in patent royalties, even a million-dollar bounty is a cheap price to pay, Cella points out. BountyQuest calls its business model a “broadcast reverse auction for information.” Needless to say, this business model is patented. The company also sees itself as being positioned as a professional service for lawyers, and as a due diligence resource for investors, merger partners, and others. On opening day, several patents were already posted on the Web site. For example, the first person to submit qualifying evidence to knock out Unocal’s patent for reformulating gasoline to reduce specific pollutants will put $50,000 in the bank. But that person will also be doing something for millions of other people, Cella says. “We posted our own money to test Unocal’s patent for an additive that appears in unleaded gasoline and could cost consumers almost six cents per gallon every time they fill up.” The first person to prove that BountyQuest’s business model is old hat can use the $14,159 reward to buy something special for someone special. And to go full circle by returning to the controversy that sparked BountyQuest in the first place, the first person to show Jeff Bezos that he’s all wet about one-click shopping will collect $10,000.

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